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Review: An Appeal In Disguise? Analysis in View of Appointment of Arbitrator Under Section 11 Of ACA Order

Article by Saima Mahmood

Introduction

Review and Appeal are two sides of the same coin, if judicial caution is not exercised while adjudicating an order under review and appeal, the same may resultantly lose its essence. Court effectively operates on legislatively imposed constraints.  Hence it becomes vital that a “Laxman Rekha” is drawn between review and appeal.

The nexus of a review and appeal is only one and i.e. the re-visiting of an order/judgement. However, the leash of the Legislature is clear in demarcating the scope and effect of review and appeal. The legislative intent is very clear so is the mischief it seeks to prevent. The legislature has given a very clear distinction between review and an appeal. Section 114 read with Order 47 of the Civil Procedure Code 1908 deals with the power Court to review its own order. However, the Code also limits the scope of such review and provides a clear demarcation to the extent that that same is not interchangeably used as powers of the Appellant Court.

This article attempts to analyze this scope of review under the ambit of the Arbitration and Conciliation Act, 1966 (as amended) (‘ACA’).

 

Definitive Limits of Review as per Civil Procedure Code, 1908

The impulse to depart from the formal design in order to announce a legal principle arises from the anomaly of “Judgement Call” of our judicial system. However, the function of our Review Court can only be exercised rightly by giving true import to the legislative intent. Scope of review has been limited to “error apparent”, if the Court has to depart from the same and go into the merits of the case, such exercise is beyond the definitive limits prescribed under Order 47 of the Code.

The Order 47of Code provides grounds for filing an application for review of the judgement which are as follows:

  1. New and important evidence is discovered by the applicant which was not in knowledge or with due diligence was unable to provide the evidence when the decree was passed.
  2. Error apparent on the face of the record and not on the erroneous decision.
  3. Any other sufficient grounds which is analogous to those specified in these rules.
  4. The misconception of the court can be regarded as the sufficient ground for review of the judgment.

The Code specifically provides that an order can only be reviewed on the grounds mentioned above. The Court has dealt with the definitive limits of Review vide various judgements. The Calcutta High Court in Soumitra Panda v. A.K. Agarwal, 1994 SCC OnLine Cal 14 has held that the review within the frame work of order 47, Rule 1 of the Code of Civil Procedure is contemplated only on error apparent on the face of the record, discovery of new fact which could not have been found out even by diligence at the appropriate point of time and for any other sufficient reason. Further the Court has analyzed the “other sufficient cause” and held that reason as contemplated in Order 47, Rule 1 means that the reason thereof must be for review which is similar in nature but does not come within the first two reasons mentioned in Rule 1 of Order 47. Even in the case of Binay Krishna v. Suraj Bali Misra[1], a Division Bench of this High Court has observed that the phrase “Ejusdem generis” is more restricted than the word ‘Analogous’. It has been made clear by the Courts that any Applicant “other sufficient cause” is limited to be similar to the other grounds as enumerated under Order 47 of the Code.

Further in Ram Sahu v. Vinod Kumar Rawat[2], the Hon’ble Apex Court held that an application for review is more restricted than that of an appeal and the court of review has limited jurisdiction as to the definite limit mentioned in Order 47 Rule 1CPC itself. The powers of review cannot be exercised as an inherent power nor can an appellate power be exercised in the guise of power of review.

Since the scope of Review and the grounds have been well settled, the next question that was raised before the Court is whether that same test shall apply to order vide which the arbitrator is appointed under Section 11 First, the Court discussed the parameters of the 1996 Arbitration and Conciliation Act. Substantive review is not maintainable since it is a product of statutes, and the ACA does not give the Court the authority to review under Section 11.

 

ACA is a self-contained Code. The intent of the Act is effective resolution of the dispute and party autonomy.

The Apex Court in recent 7-judge bench judgement[3] In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 paragraph 93 has observed that  “The Arbitration Act is a self-contained code inter alia with respect to matters dealing with appointment of arbitrators, commencement of arbitration, making of an award and challenges to the arbitral award, as well as execution of such awards[4]. When a self-contained code sets out a procedure, the applicability of a general legal procedure would be impliedly excluded[5]. Being a self-contained and exhaustive code on arbitration law, the Arbitration Act carries the imperative that what is permissible under the law ought to be performed only in the manner indicated, and not otherwise. Accordingly, matters governed by the Arbitration Act such as the arbitration agreement, appointment of arbitrators and competence of the arbitral tribunal to rule on its jurisdiction have to be assessed in the manner specified under the law. The corollary is that it is not permissible to do what is not mentioned under the arbitration Act. Therefore, provisions of other statutes cannot interfere with the working of the Arbitration Act, unless specified otherwise.”

In Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 the Hon’ble Court has held that application of the general principles of a special Act set out a self-contained code and the applicability of the general law procedure would be impliedly excluded.

 

Supreme Court observation on Review of Order for appointment of Arbitrator

The Apex Court in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 wherein the court has observed that “..while entertaining an application under Section 11(6) of the Act is adjudicatory, then obviously, the outcome of that adjudication is a judicial order. Once it is a judicial order, the same, as far as the High Court is concerned would be final and the only avenue open to a party feeling aggrieved by the order of the Chief Justice would be to approach the Supreme Court under Article 136 of the Constitution.”

Further, in Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 it was observed that “14. The Arbitration and Conciliation (Amendment) Act, 2015 (w.e.f. 23-10-2015) has brought in substantial changes in the provisions of the Arbitration and Conciliation Act, 1996. After Amendment Act 3 of 2016, as per the amended provision of sub-section (6-A) of Section 11, the power of the court is confined only to examine the existence of the arbitration agreement. It further clarifies that the decision of appointment of an arbitrator will be made by the Supreme Court or the High Court (instead of Chief Justice) and under Section 11(7), no appeal shall lie against such an appointment.”

 

Scope of Review in Order for Appointment of Arbitrator by the High Court  

The Allahabad High Court in Manish Engineering Enterprises vs. Managing Director, IFFCO, New Delhi & Ors.[6], has held that the power of review is a creature of the statute. In the absence of such specific power, a review is not maintainable, unless the review is a procedural review.

In Sanjay Gupta v. Kerala State Industrial Development Corporation Ltd., the Kerala High Court explained this principle by observing that the Review of Order under Section 11 of the Arbitration & Conciliation Act, 1996 does not lie with the High Court. Even when a Judge of the High Court acts as a Nominee of Chief Justice, he acts merely as a Statutory Authority as designated by the Chief Justice in terms of Section 11 of the Act. Therefore, unless the power of review is expressly conferred under the Act itself, general power of review as may be available to the High Court under other jurisdictions : civil, criminal or writ, cannot be extended to review the earlier Order issued by the Nominee of the Chief Justice.[7]

The Madhya Pradesh Court in Cobra-CIPL JV v. Railway Electrification[8], held that review petition under section 11 order is not maintainable.

The Andhra Pradesh High Court in Nagireddy Srinivasa Rao vs. Chinnari Suryanarayana[9], has observed that “There is no provision in the Arbitration and Conciliation Act, 1996, providing for a review of an order passed under Section 11 of the Act. The provisions of the Act also do not make out a case for holding that such a power of review is available by implication.”

The Calcutta High Court in Sarada Construction vs. Bhupendra Pramanik and Ors.[10], has observed that “the Act is a complete code which does not specifically confer any power upon this Court to review an application under the statute which is section 11 of the Act and consequently, a review in the instant case is not maintainable”.

Most recently, The Delhi High Court in M/s Diamond Entertainment Technologies Private Limited & Ors. vs. Religare Finvest Limited[11], has observed that “By way of the present review petition, the petitioner is seeking review of the Order vide which an application under Section 11 of the Arbitration & Conciliation Act, 1996 has been allowed. Since the Order made under Section 11 of the Act is in exercise of the statutory powers as defined under the Arbitration & Conciliation Act, any review of the same can be only within the parameters of the Statute. Since, there is no provision of review in the Arbitration & Conciliation Act, this Court finds itself without any jurisdiction to review the present Order.”

 

Conclusion

From the plethora of judgment as provided above, it can be safely concluded that the power conferred to the referral Courts adjudicating on Section 11 of the ACA, do not have the power to review their judgement for appointment of arbitrator. Since the ACA is a self-contained act and do not envisage a scope of review under Section 11 therefore, no review may lie before the referral Court. Additionally, it is important to clarify, though ACA has curbed the right to review the appointment of arbitrator order, however it has not left the Appellants remediless. Section 16 of the ACA provides for power to the Arbitral Tribunal to rule over its own jurisdiction which also includes challenging the appointment of arbitrators. The purposive interpretation of the ACA is clear that any dispute arising out of an arbitration agreement is required to be dealt before the Arbitrator. Further, this not only unburdens the Referral Court but also acts as an effective remedy.

 

[1] AIR 1963 Calcutta 100
[2] (2021) 13 SCC 1
[3] 2023 SCC Online SC 1666
[4] Pasl Wind Solutions (P) Ltd. v. GE Power Conversion (India) (P) Ltd., (2021) 7 SCC 1; Kandla Export Corporation v. OCI Corporation, (2018) 14 SCC 715
[5] Subal Paul v. Malina Paul, (2003) 10 SCC 361
[6] 2008 SCC OnLine All 84
[7] 2009 SCC OnLine Ker 6361
[8] 2021 SCC OnLine MP 5439
[9] MANU/AP/2580/2022
[10] 2023 SCC OnLine Cal 342
[11] 2023 SCC OnLine Del 95
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